Lululemon Athletica Inc. (NASDAQ: LULU) is an athletic apparel company focusing on yoga, training, running, and most other sporting activities. The company is considered a high-end luxury athletic apparel company. To stand out, the company utilizes cutting-edge fabrics and design. Additionally, it is renowned for its top-notch customer service. It began in Vancouver, Canada, in 1998. It has since grown to become a global brand.
Lululemon Stock Performance
Lululemon (LULU) stock has risen since December 7, 2023, after the company released its Q3 earnings report. In the past five days, the stock is up 6.63%. Year-to-date, the stock is up 51.41%. At the current pace, the stock is on record to set a new 52-week high. It surpassed its past high during the current trading session and set a new one at $499.65 per share. By the end of trading on December 11, 2023, it will have set a new 52-week high.
The strong earnings number has helped to boost the stock price. Lululemon reported an EPS of $2.53, surpassing estimates by 10.81%, while revenue was reported at $2.19 billion, surpassing estimates by 0.78%.
CEO Calvin McDonald said this year’s Black Friday was the single largest sales day in its history. He predicted the positive trend would persist throughout the holiday season. However, CFO Meghan Frank pointed out that the company remained wary of macroeconomic uncertainties that could impact their business.
Its total comparable sales were up 14%, while net revenue was up 19% year-on-year. The company reported that growth had been especially strong outside France, where sales rose 49% year-on-year in the direct-to-consumer segment.
In a sign of a healthy business, it reported that falling inventories accompanied strong growth. Profits rose 21% this quarter compared to last year as well. However, they had a contraction in operating margin. However, given its strong pricing power; that is likely temporary.
In the Q3 report, the company also revealed that the board had approved a stock repurchase program for $1 billion on November 29, 2023.
Company Outlook
In its outlook section, the company expects net revenue of $3.135-$3.170 billion, a 13%-14% growth year-over-year. It also predicted an EPS of $.85-$4.93. For FY23, the company projects revenue of $.549-$9.584 billion, which would be a growth of 18%. Its FY23 EPS prediction is $12.34-$12.42.
Lululemon Stock Forecast
The retail sector has had a bad year in 2023. Despite this, Lululemon continues to beat expectations in all categories. It has successfully navigated the tough times for unparalleled success by capitalizing on the global fitness trend. Lululemon is the go-to brand in the lucrative affluent female customer segment.
Its efforts have paid off in Asia and North America. It is thus no surprise that the company’s stock is approaching historic all-time highs. The company is valued at around x30 its operating profit, similar to the highs Nike achieved at the height of the pandemic. Competitors, such as Under Armor, focused on a masculine audience, have seen sales slump.
Analysts have given LULU stock a buy rating based on its current and projected performance. They predict the stock could reach a high of $546 and a low of $257. Their average target for LULU stock is $458.59, which would be a -7.73% decline based on the current price of $497.88 per share during early trading on December 11, 2023.
Should You Buy LULU Stock
LULU stock will likely set new records during the morning trading session on December 11, 2023. As such, many analysts do not see an upside for the stock in the near term. However, based on its strong performance in the affluent female sports apparel segment, the stock could have a considerable upside in the long term. As such, the moderate buy rating by analysts is an accurate one.
Disclaimer: This website provides information about cryptocurrency and stock market investments. This website does not provide investment advice and should not be used as a replacement for investment advice from a qualified professional. This website is for educational and informational purposes only. The owner of this website is not a registered investment advisor and does not offer investment advice. You, the reader / viewer, bear responsibility for your own investment decisions and should seek the advice of a qualified securities professional before making any investment.